EV tax credit + mortgage itemized deductions for a married couple (which is better jointly or separately)?

[JohnDoe752]

Hi, we are living in CA state and have Person №1 (income 145K before tax, who is head of household + father of 1 child before 13 years and paid ~36K of mortgage interest payments only which are more than the standard itemized deduction of ~13K for filling married separately of ~26K for filling married jointly) and have wife Person №2 (income 170K before tax which also could be head of household, as she named in the title for the house loan). And let’s imagine we bought a Tesla and want to get an EV tax credit (both Person 1 and Person 2 are named in the car title). Correct me if I’m wrong, but is it better in our case to fill in tax as married filing separately, so that Person №1 will get full EV TAX Credit ~7.5K + CA EV TAX Rebate ~2K plus will get itemized tax deduction 36K instead 19K + 2K for 1 child tax refund and my wife will get ~13K standard itemized deduction?

1. Can Person 2(wife) fill as married filing separately and which standard deduction she will get? 12,950 or as head of household 19,400?
2. Can Person 1 get an EV tax credit if he is a co-registrant on the car title and married filing jointly is more than 300K but we will fill as filing married separately?

Thank you in advance.

[Vanessa A]

1.  If you are married, you cannot claim head of household.  You can only file as Joint or Separate, so her standard deduction would be $12,950.

2. Yes, you could claim the EV credit as co-owner, if you filed separately with your income at $145K.  If your income is over $150k, you could not claim the credit with a married filing separate status. 

Be aware, that if you file separate, if one of you itemize your return, you both must itemize.  This means, if one of you itemize, and the other does not have any expenses to itemize, since they lose the standard deduction, they will have no deductions at all when it comes to the standard vs itemized deductions.

The best way to do this is to run both scenarios in TurboTax, even if you create a "dummy" account and just enter the numbers.  This will tell you exactly which way is best for you to file.